– This article was originally published by Rupesh Sah in the Himalayan Times on the December 30, 2018.
It is only human nature, to seek the best product/service at the cheapest price available in the market. But as consumers, we rarely think about what will happen to other producers when we do not buy their goods. Are we, as consumers then being selfish and brutal to them by not buying inferior goods? Most will agree that we are not. That is just how markets work, and we get the best products at competitive rates. The inferior producer either improves the product to survive in the market or exits the market as s/he fails to compete with the superior producers. This competition is one of the major drivers for R&D and innovation and consequently, improving our lives.
The law of the market in some way resembles the law of nature propounded by Charles Darwin “Survival of the fittest”, as said by Darwin “It is not the strongest of the species that survives, nor the strongest of the species that survives. It is the one that one that is the most adaptable to change.” If an organism cannot adapt, then it is out of the game. It is harsh but it is how nature works. The modern market also guided by a similar principle. The father of economics Adam Smith, in explaining this phenomenon, mentioned that in a free market economy competition takes places and economy runs on its own by an invisible force. Competition seems to be the key factor to both evolutions in nature and innovation in the market.
Competition leads to innovation to make products cheaper and better which is ultimately good for the end consumers. This free competition and new innovation are only possible in a free market economy. This is the reason why the most innovative countries are also the most developed and have high levels of economic freedom. According to 2018 “Index of economic freedom,” the top seven countries with economic freedom are Hong Kong, Singapore, New Zealand, Australia, Ireland, and Estonia whereas the bottom seven are North Korea, Venezuela, Cuba, Congo-Brazzaville, Eritrea, Equatorial Guinea and Zimbabwe. Thus, we can relate economic freedom with innovation and growth. If we look at Nepal’s ranking, we stand below Zambia, Ghana, Kenya, and Haiti.
There are many revolutionary companies, services and products that are coming up every day from different sectors. There will be many new systems, services and companies that won’t fit in the legal framework of today, and we will have to adapt and reform our rules to welcome them in the future. The countries that welcome competition, innovation and adaption have incubated fastest growing startups like Airbnb, Uber, udacity, and many more. Driverless cars, artificial intelligence and automation, e-residence, online banking, online education, global digital payment, soilless farming, genetically modified and improved crops are some of the new potential sectors. Indeed, the world is moving at a different speed than in Nepal. Today, around the world, people can get bank loans faster from home than the time it takes to get to an actual bank. Likewise, it is, with global company registration and payment. People can get an education from the world’s top universities remotely from home; companies like uber and airb&b are creating economic opportunities for general people by meeting unused resources with market demand. The world is welcoming and is ready to adopt the fourth industrial revolution.
Having said that, in Nepal, we have isolated ourselves from the global race and competition. We rank at 110thposition in ease of doing business, 133rdin Index of Economic Freedom, 109that Global Competitiveness Ranking and 83rdin International Property Rights Index. The world is entering the fourth industrial revolution and we cannot even shop online at Amazon, Alibaba, etc. to date. We have put up artificial entry barriers in every sector. Our laws bar us from being competitive, innovative and producing (or even importing) many items which are not identified by our government as a result of our inability to cope with the pace of global advancements. As a result, competent people and companies of Nepal migrate to where they can compete for their growth and prosperity. We know that Nepal does not lack intellectual and talented people as evidenced by the fact that the same Nepali people are exhibiting great potentials in the global market when they are representing another country. If we can do anything to help the remaining all we have to do is learn from wisdom of nature and consider adopting “Darwinism” for economic development.